Derivative liability

9 Months Ended

Sep. 30, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative liability

16. Derivative liability

The short-term convertible notes issued to convertible note holders disclosed in note 10 above, have variable priced conversion rights with no fixed floor price and will reprice dependent on the share price performance over varying periods of time. This gives rise to a derivative financial liability, which was initially valued at inception of the convertible notes at $1,959,959 using a Black-Scholes valuation model.

The derivative liability is marked-to-market on a quarterly basis. As of September 30, 2022, the derivative liability was valued at $300,582.

The following assumptions were used in the Black-Scholes valuation model: 

	Nine months ended September 30 2022
Calculated stock price		$0.0004 to $0.0010
Risk free interest rate		0.06% to 4.25	%
Expected life of convertible notes and warrants		3 to 33 months
expected volatility of underlying stock		167.1% to 247.0	%
Expected dividend rate		0	%

The movement in derivative liability is as follows: 

	September 30, 2022			December 31, 2021
Opening balance	$	515,901		$	4,765,387
Derivative liability extinguished on convertible notes converted to equity		(39,726	)			(2,914,119	)
Derivative liability on issued convertible notes		—			190,824
Fair value adjustments to derivative liability		(175,593	)		(1,526,191		)
Closing balance	$	300,582		$	515,901